Borders closes book on CEO

CBS.MarketWatch.com

ANN ARBOR, Mich. (AP) -- Borders Group Inc. announced today that its chief executive officer had resigned, leaving the nation's second largest bookstore chain after just five months on the job.

The company declined to comment on why Philip M. Pfeffer was leaving. He will be replaced by Borders chairman and former CEO Robert DiRomualdo.

In addition to the resignation, the Ann Arbor, Mich.-based company also announced a reorganization of its executive offices, naming new managers of its Waldenbooks chain and its online business.

While Borders
BGP, +0.00%
earned $92 million last year on sales of $2.3 billion, it has failed to keep pace with brick-and-mortar rival Barnes & Noble
BKS, +0.00%
and Internet giant Amazon.com
AMZN, -1.80%

Analyst Dave Ricci of William Blair & Co. said the company has had trouble meeting sales targets in recent months.

Borders' stock fell $2.18 3/4 to $14.87 1/2 in early trading today on the New York Stock Exchange.

Pfeffer previously worked as president and chief operating officer of Random House from 1996 until its acquisition by Bertelsman AG.

DiRomualdo said the company would begin a national search for a replacement.

Bricks and mortar profit

Borders said today its retail stores would post a profit of 4 to 5 cents per share for the quarter, while Borders.com would lose 5 to 6 cents per share. The company also said Pfeffer's departure would cost 4 cents per share.

Borders was founded in 1971 in Ann Arbor as a used book store. It now owns 250 Borders superstores and 900 mall-based Waldenbooks stores.

Other management changes announced today include the appointment of Kathy Winkelhaus to president of Borders Group Stores, a new position. Ronald Staffieri has been named to replace Ms. Winkelhaus as president of Waldenbooks.

Cedric Vanzura has been named President of Borders Online. He previously served as senior vice president of electronic commerce and fulfillment services.

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